UNITED STATES ---------------
SECURITIES AND EXCHANGE COMMISSION SEC FILE NUMBER
WASHINGTON, D.C. 20549 0-23226
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FORM 12B-25
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NOTIFICATION OF LATE FILING CUSIP NUMBER
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(Check One): [X] Form 10-K [ ] Form 20-F [ ] Form 11-K [ ] Form 10-Q
[ ] Form N-SAR [ ] Form N-CSR
For Period Ended December 26, 2004
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[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended
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Read Attached Instruction Sheet Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify
the item(s) to which the notification relates:
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PART I - REGISTRANT INFORMATION
Grill Concepts, Inc.
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Full Name of Registrant
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Former Name if Applicable
11661 San Vicente Blvd., Suite 404
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Address of Principal Executive Offices (Street and Number)
Los Angeles, California 90049
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City, State and Zip Code
PART II - RULE 12B-25(B) AND (C)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25 (b), the following
should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
(b) The subject annual report, semi-annual report, transition report on
[X] Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion
thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q, or portion thereof, will be filed on
or before the fifth calendar day following the prescribed due date;
and
(c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
PART III - NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, N-CSR, or the transition report or portion thereof, could not be filed
within the prescribed time period. (Attach extra sheets if needed.)
Grill Concepts, Inc. (the "Company") is unable to file its Annual Report on Form
10-K for the fiscal year ended December 26, 2004 in a timely manner without
unreasonable effort or expense in light of the circumstances described below:
On March 24, 2005, management of the Company discussed with the Audit Committee
of the Board of Directors of the Company (the "Audit Committee") and
representatives of the Company's current independent registered public
accounting firm the views expressed by the Office of the Chief Accountant of the
Securities and Exchange Commission (the "SEC") on February 7, 2005 regarding
certain operating lease accounting issues and their application under generally
accepted accounting principles ("GAAP") as they relate to the Company's current
lease accounting practices. Based on those discussions, management of the
Company and the Audit Committee made a determination that the Company's
then-current method of lease accounting, including its then-current method of
accounting for rent holidays and computation of minimum lease payments, were not
in accordance with GAAP and that the impact of this difference was material to
the Company's historical financial statements. The Company is in process of
discussing the impact of the SEC guidance with respect to lease accounting on
our historical financial statements with our former independent registered
public accounting firm. At this point however, the Company has not had adequate
time to provide said firm with sufficient information on which to base a
conclusion as to the impact of this guidance, and no conclusions have been
reached.
Historically, the Company recognized straight-line rents and amortized tenant
improvement allowances using the initial non-cancelable term of the lease
commencing on the date rent payments began. Under GAAP, as highlighted in the
SEC guidance, the Company should have recognized rent expense (net of the
related tenant improvement allowances) on a straight-line basis over the initial
non-cancelable term of the lease and beginning on the later of when the Company
has access to the site or the lease is executed. Further, the Company
historically has not included consumer price index adjustments in its
computation of minimum lease payments. GAAP requires that lease escalation based
on future consumer price index adjustments be included in the computation of
minimum lease payments using the index rate at lease inception. The Company is
in the process of finalizing the calculations to quantify such adjustments.
Also at the March 24, 2005 meeting, management discussed reclassifying amounts
that had previously been recorded as restaurant sales revenue arising from
complimentary and promotional activities as the current method of recording
these transactions was not in accordance with GAAP. Historically the amounts
associated with complimentary and promotional activities have been recorded as
restaurant revenues, with the offsetting expense in restaurant operations and
corporate general and administrative expenses. As revised, the Company will
account for complimentary and promotional activities on a net basis with no
revenue or expense being recognized. The total amounts of complimentary and
promotional activities recorded as revenue were $1.9 million in 2004, $1.7
million in 2003 and $1.5 million in 2002. There will be no impact on net income
resulting from this reclassification.
As a result of the foregoing determinations we are correcting our method of
accounting for leases and our presentation of amounts resulting from
complimentary and promotional activities. Our 2004 financial statements will
reflect the lease and revenue accounting on these revised basis, and we will
restate our financial statements for 2002 and 2003 to ensure the revised
accounting is consistently applied. In light of the planned restatement, the
financial statements for the years ended December 31, 2003 and 2002 and related
interim periods contained in the Company's prior filings with the SEC should no
longer be relied upon. The Audit Committee discussed these conclusions with the
Company's current independent registered public accounting firm.
The Company is working diligently to complete its review of its accounting for
these leases and to quantify the impact of the necessary adjustments on each of
the reporting periods. Upon completion of this process the Company will amend
the appropriate filings with the Securities and Exchange Commission ("SEC") to
include the restated financial statements.
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Michael Sanders 832 446-2599
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is
no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion
thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
As discussed in Part III above, the Company will restate its financial results
for prior periods. As of the date of this filing, the Company is unable, without
unreasonable effort and expense, to provide a quantitative assessment of the
impact that the corrections to its lease accounting practices will have on the
results of operations for fiscal 2004 and prior periods. The Company is working
diligently to complete its review of these matters and to quantify the impact on
each of the affected periods. The Company does not expect these adjustments to
affect the amount of revenues, comparable store sales, or cash balances
previously reported.
Grill Concepts, Inc.
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(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date March 29, 2005 By /s/ Philip Gay
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Philip Gay, Chief Financial Officer